Chrysler: Want $2.99 Gas For 3 Years? Guaranteed?

Chrysler is betting that you’re worried about volatile gas prices. So worried, in fact, that you’ll leap at the opportunity to “lock in” a price of less than $2.99 a gallon for 3 years by buying a new Chrysler, Dodge or Jeep.

ABCNews explains:

The automaker unveiled a “gas card” program, guaranteeing $2.99-a-gallon gasoline for three years to people who buy or lease new cars from Wednesday through June 2, 2008. Customers will be limited to 700 gallons each year and must buy one of 23 models. Chrysler will pay for the cost of gas exceeding $2.99 — an incentive with a psychological twist.

Are you interested?

The Chicago Tribune says:

Chrysler’s major competitors, Ford Motor Co., Toyota Motor Corp., General Motors Corp., and Honda Motor Co. all said they would not follow with their own subsidies, but Suzuki Motor Corp. has made a similar offer in the U.S. with free gas for the summer.

@thetango: Seconded…. sort of. My Jeep Wrangler has been super reliable and issue free since I bought it new in August 1998. The MPG rating with today’s and (for arguement’s sake) “tomorrow’s” $5 a gallon gas prices have me seriously considering getting an inexpensive new commuter vehicle that sips gas (like a SmartCar).

Although I love the versatility and reliability of my Jeep, I can say that I will not be buying another Wrangler until their MPG ratings get a bit higher. The fine print on the Jeep website also states that Wranglers are excluded from the offer, and IMHO the rest of the Jeep model offerings are crap.

The average vehicle has a 15-20 gallon tank. So lets see 700/15 = 46 fill ups on low end models, 700/20 = 35 fill ups. I don’t know what the MPGs are, but I fill up about once a week on my 17 gallon tank so 41 fillups(41 weeks) / 4 = 10 1/4 months. Doesn’t sound that great. Chrysler will make up the difference in the interest you pay on your new car note.

Yer kidding on the Smart Car, right? Her’s a letter I sent to Salon when they did an article on the thing hitting stateside Oct of last year:

Base on the PURE fortwo is around 12K, base on the PASSION fortwo is 14K. I’m not sure how many options you’ll drop in there, but for this you get a 3 cylinder engine and no room for anything.

Lets see what 12-14K will get you otherwise in car markets:

For around 12-13K I can get an Hyundai Accent, 4 cylinder engine, AC, CD stereo, Power windows/locks and remote keyless entry.

For around 15K you can get a Honda Fit with all of the above, plus extras like fold flat rear seats. A friend has a fit and with the back seats folded flat fits her St Bernard and Rottie (both full grown) while driving around.

For the Buy USA crowd, you can get a Dodge Calibur with similar features, a ton more room, fold flat back seats, and aux in jack with your standard cd players for around 16K.

I could go on, but these three prime examples show why Smart won’t ever be anything more then a niche vehicle. If they could price it around 8-10K, they would be fantastic, but for the same price, I can get much more car in some of the awesome sub-compacts that have come out recently. For a little more, I can get a vehicle big enough to use for camping trips and everything else.

The only folks who are going to buy em are people who can afford two cars, one for fun and one to commute to work with. For that, awesome, but Mercedes went and priced them out of the general public’s usefulness. They’re fantastic vehicles, but why would I spend that much on so little?

*all comparisons were priced at bottom trim levels with basic comfort packages (ac/cd player/etc) added in, as well as keeping them manual transmissions.

Now, looking over the smartcar website, they recommend PREMIUM fuel to get the estimated 33/41 mph (city/hwy) based on 2008 EPA standards.

So, if premium is on average 30 cents more a gallon, and you can get much more car for similar money in the Honda Fit, why would anyone choose a smart car? Between the difference in prices of regular and premium fuel, plus the negligible difference in mpg, it’s not worth it. I love the concept, but you need to sell them for around 8-10K, total, to make them worth it, and to actually make them worthwhile to the average consumer in the US. Right now they’re just high end, feel-good-about-yourself toys. Plus, the Fit can go above 90mph, AND doesn’t make you feel fearful to get on the freeway.

@levenhopper: It doesn’t really matter what the numbers are, it’s a psychological game. People now don’t want to buy big cars because of expensive gas. Guarantee them $3 a gallon for three years and in their minds, they’ve just traded a gas guzzler for a less-than-gas-guzzler.

Add in the dimension that most people don’t keep cars longer than three years nowadays and (again psychologically) it’s a lock.

A co-worker at my old job had an inventive way to save money on commuting to work. She and her husband both bought used Ford Festivas. Appearance aside, they get insanely good gas milage.

To make the idea even better, Festivas apparently have a switch that trips when they’re even in minor fender-benders that disables the fuel pump as a safety feature. She said most people don’t know about the switch, so when they get into a minor accident, the car won’t start anymore and they can’t figure out why, and end up almost giving the car away for about $50-100. Once they buy it on the cheap, they simply flip the hidden switch, and *bam*, super-cheap car for work commuting that has unreal fuel economy.

With rising gas prices, I’m almost tempted to borrow their idea myself.

At current prices, I’m at about $45 a week in gas, and 700 gallons is a little more than a year (58 weeks for 700 gallons). So, taking the 700 full per year, that would give me:
$2,632 at current price ($3.76 premium)
$3500 at $5
$2,093 at 2.99
$0,541 savings from current
$1,407 from $5.

So, just about 4200 saved, and their cars are starting between 15 and 20k. Maybe compelling if you are considering a new American car.

…not counting the cost of a new car. I was going to be all snide and do a negatiove savings v. a Chrysler or Dodge, but it appears they don’t make one I would want given to me, so I wasted trips to their sites.

But, many folks, I’m certain, will get pulled in, even if it doesn’t save them a penny.

the fine print of this deal probably says something like “we reserve the right to define 3 years as 365 days or 24 weeks, whichever comes first. by agreeing to this, you are subject to a $9.99 monthly service charge unless you submit, handwritten in a SASE that you choose to cancel the subscription service. by canceling the subscription, you agree to release chrysler from liability due to poor craftsmanship, thousands of american layoffs and occasional explosions while exceeding 45MPH. “

Not only do you get unholy MPG, it’s diesel. Oh yeah, the savages in the USA don’t like using diesel fuel or driving cars which make sense for anything less than hauling half a house of junk or giant animals around in.

@christoj879: “Even if gas goes to $5 this still isn’t a lot for them to pay out. $5-2.99 = $2.01 x 700 = $1407. And that’s if the person buys all 700 gallons. Not a great deal.”

It’s already 4 dollars here in Hawaii. Taking into account that some investors are speculating that oil will break the 200 a barrel mark by the end of the year it sounds like a great deal. Not to mention, if you buy the highest octaine gas it’s already pretty close to $5.

Some of you are forgetting that is 3 years at 700 gallons a year so a total of 2100 gallons. Who is to say Gas doesn’t rise to 6 dollars? Regardless you will save compared to now, its a very tempting offer if you were considering a Chrysler.

And quit spewing the lies that Chryslers are pieces of shit. My mom has two (one about 6 years older than the other) Chrysler Town & Country Vans and minus a few small repairs as they aged those cars still run and did much better than my dad’s Lincoln.

From Chrysler.com: “Cards are not transferable. If a consumer sells their vehicle before the program expiration date, turns-in their lease before the program expiration date, or disposes of their vehicle for any other reason, the card will continue to function for the original consumer as designed.”

So its basically treated as a rebate that you basically don’t know the final value unless your God and know the future prices of fuel.

@theblackdog: In all likelihood, nothing happens. Your car runs as usual since cold climates are supplied with winterized diesel that doesn’t gel at low temps. People in Minnesota can still go to the supermarket a buy food in winter, no? The tractor-trailer hauling it there was running winterized diesel.

@theblackdog: In countries where it’s used a lot, like here in the Netherlands, diesel is actually cheaper right now and we have temperatures below 32 in the winter and we are fine.

You are actually lucky with those car prices, they are actually going to be cheaper in the USA than they are in Europe right, if I’d buy a “PASSION” model right now it would cost me 16k EURO, so around $23k.

I can understand you’d rather buy a car that is cheaper initially, that could handle more. Over here we don’t really need a million cilinders and the smaller the better, especially when parking in urban areas. It is mainly targetted at people commuting into cities where the small size of the car has a great advantage too.

@theblackdog: Only had diesel freeze up in the fuel tank once with my old Mercedes 240D. Then again, I live in Florida and they didn’t sell the winter diesel here. Picked up a fuel additive at the auto parts store to handle that and never had that issue again…while getting 35MPG in a 1977-vintage full-size car.

I still think it’s quite pathetic that today’s cars aren’t getting that type of mileage. What have we done for the past 30 years?

While this is a great psychological tool, and will steer people to Chrysler, this plan will do nothing to REDUCE FUEL CONSUMPTION, which is what needs to happen in this country. Some reasons for the spike in the cost of gasoline that aren’t reported much? (1) Our “addiction” to large fuel-inefficient vehicles, (2) our focus on cost for us rather than cost for all of us, and (3) a weak dollar due to trade imbalance. Thanks Chrysler for making things worse with this offer.

@LJKelley: And I’ve got a mid-90s Dodge Ram that I’ve beaten like it was going out of style and it’s still running like a dream besides some minor electrical problems (broken cigarette lighters that I never use anyway, two speakers blown). My truck’s a vehicle, not a smoker’s lounge or a concert hall.

I guess people like us got lucky, but I always considered Dodge a more reliable brand.

@Concerned_Citizen: There are many more downsides, in my opinion. It will encourage people to buy big cars they don’t need, because they’ve got a “hedge”. It will transfer the excessive cost of gas to them, but only for people who spend money that – in most cases – they don’t need to spend, on a new car. Meanwhile the manufacturers will continue to seek concessions from their labor, while they subsidize the high cost of gas. And, If more manufacturers offer this (i.e. it becomes more widespread) then it could have the effect of driving up gas prices even more.

The high price of gas is supposed to force everyone to buy smaller, more efficient cars. But deals like this only delay the inevitable at best, and at worst make gas more expensive for everyone else, just so Chrysler can clear out an over-inventory of cars that they shouldn’t have built to begin with.

@WraithSama: Festivas really are awesome, except for the whole windshield as an integral part of the frame.

I used to deliver pizzas in college and the delivery car was Festiva, and a good friend had one for quite awhile. The thing always got at least 43MPG… Plus room to store crap if fold down the seats…

Those cut-off switches are standard now. My old ’89 Escort had one over the left rear wheel well. One time I was moving my gf into her college dorm room. I had my car packed with her crap and went over a giant bump; my car bottomed out and stopped dead.

I am lucky I knew about the switch otherwise, I’d probably gotten soaked my a local mechanic…